Class Action Is Struck Down In Suit Against Drug Makers

Published: March 19, 1995

CHICAGO, March 18—
A Federal appeals court has ruled that thousands of hemophiliacs who contracted the AIDS virus from blood-clotting medicine cannot join a lawsuit against the companies that made it, in part because the suit might bankrupt the pharmaceutical industry.

In a 2-to-1 ruling on Friday, the court ruled that a Federal District Court judge who had consolidated cases into a class action exceeded "the permissible bounds of discretion."

Such a class action would allow one jury to "hold the fate of an industry in the palm of its hand" and could "hurl the industry into bankruptcy," Judge Richard A. Posner wrote for the 7th U.S. Circuit Court of Appeals here.

The lead lawyer for the hemophiliacs, David Shrager, said he would seek a rehearing next week before the full seven-member appeals court.

"I find this extraordinary," Mr. Shrager said. "These are affluent companies, and it has never been the purpose of this litigation to bankrupt these companies."

The Federal Centers for Disease Control and Prevention in Atlanta estimates that 9,000 U.S. hemophiliacs -- 45 percent of the hemophiliac population -- were infected with H.I.V. more than a decade ago from medicine they took to clot their blood.

At least 1,900 hemophiliacs died from AIDS from 1981 through 1993. Currently, about one hemophiliac dies a day from AIDS.

Hemophiliacs contend the manufacturers resisted heat-treating donated blood for years despite growing evidence that the process kills H.I.V., the virus that causes AIDS.

The lawsuit contends that four drug companies knowingly distributed clotting products contaminated with H.I.V. It also accuses the New York-based National Hemophilia Foundation, a research and information group partly financed by blood-product manufacturers, of misleading doctors, patients and the public early on about the AIDS threat.

The defendants say they acted properly and started screening blood for H.I.V. as soon as a test was available in 1985.

Mary Thomas, a spokeswoman for the Baxter Healthcare Corporation, one the companies being sued, said the appellate ruling could lead to renewed settlement talks. In August, a committee representing hemophiliacs who had H.I.V. and their survivors rejected a $160 million settlement from Baxter and another drug maker. The class-action lawsuit never specified a dollar amount since there are hundreds of individual suits in state and federal courts.